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Work Requirements Don’t Work

BY

The federal Centers for Medicare & Medicaid Services is expected to announce this week that states may block some low-income adults from getting Medicaid coverage if they’re not working or participating in work-related activities. But evidence from the Temporary Assistance for Needy Families program — which policymakers are touting as a model for work requirements in other programs, including Medicaid — shows that work requirements won’t move people out of poverty and eliminate their need for health coverage.

A comprehensive review of work requirement experiments and policies for cash assistance recipients shows:

Employment increases among cash assistance recipients who were subject to work requirements were modest and faded over time. For the recipients, employment rose significantly in the first two years of programs that mandated participation in work-related activities but, by the fifth year, the difference in employment rates between those who faced work requirements and those who didn’t had faded. Over five years, at least three-quarters of recipients worked, regardless of whether they faced work requirements.

Stable employment among cash assistance recipients subject to work requirements proved the exception, not the norm. The share of recipients subject to work requirements who worked stably — i.e., in 75 percent of the quarters in years three through five — was small, ranging from 22.1 to 40.8 percent.

Over the long term, the most successful programs supported efforts to boost the education and skills of those subject to work requirements, rather than simply requiring them to search for work or find a job. The two most successful welfare-to-work programs, in Portland, Oregon, and Riverside, California, are often characterized as “work first” programs that required individuals to find jobs quickly, but both supported participation in education or training for some participants. For example, the Portland program, which had the most significant long-term impacts on earnings, initially assigned some participants to short-term training programs and encouraged them to hold out for better-paying jobs.

Most cash assistance recipients subject to work requirements stayed poor, and some became poorer. Although recipients were likelier to be employed within two years of facing work requirements, their earnings weren’t enough to lift them out of poverty — and, in some programs, the share of families living in deep poverty rose. Only two of 13 programs studied significantly reduced the share of families living in poverty, and in all of them, recipients facing work requirements were likelier to live in deep poverty than above the poverty line.

Voluntary employment programs can significantly boost employment without the negative impacts of ending basic assistance for individuals who can’t meet mandatory work requirements. The main downside of imposing work requirements on public benefit recipients is the harm they can cause to the individuals — and their families — who can’t comply and lose essential assistance as a result. The results from a rigorous evaluation of the Jobs-Plus demonstration, an employment program for public housing residents, suggest that voluntary work programs can be successful without the harmful consequences that typically accompany work requirements.